Analyst: I'm In China, And iPhone 5S Demand Is 'Disappointing' People

Cantor Fitzgerald analyst Brian White has been touring China and
Taiwan this week, and filing reports on what he's hearing.

Today, he has some bad news for Apple (and Samsung):

During today's discussions, we walked away with the clear message
that the momentum remains with the China-based smartphone
vendors, including Lenovo, Huawei, ZTE, Coolpad, and Xiaomi. The
tone around Xiaomi was even more positive than in past trips,
while Coolpad seems to be the most aggressive around
pricing.

We believe the momentum at the
China-based brands is increasingly impacting Samsung, while Apple
has already been struggling over the past 12-18 months. In the
near term, we sensed disappointment around demand for the iPhone
5S.

That said, we heard great
enthusiasm around the potential for Apple to introduce a larger
iPhone form factor in China this year with the iPhone 6. In our
view, the iPhone 6 with a larger screen (e.g., 4.7-inch,
5.5-inch) has the potential to meaningfully accelerate Apple's
growth trajectory in China during 2H:14. We have not heard this
type of excitement in China around the iPhone in at least two
years and thus we believe this could be a very special iPhone
launch for Apple.

White is an Apple bull. He
rates the stock a buy and has a $777 price target.